Toyota May Slow Building of U.S. Plants

Toyotalogo

Five years after Toyota began a push to build far more cars in the U.S. — including at a plant near San Antonio that began turning out the redesigned Tundra last year — the automaker is thinking about slowing its pace of building here, afraid that the market may tank and finding itself at odds with the dollar-yen exchange rate.

According to the Wall Street Journal, Toyota has issues over the logistics of plants that have been placed across the U.S., particularly the costs associated with having those plants so far apart. In Japan, Toyota's plants are clustered in one location. The yen situation also means that it may be cheaper for the automaker to import cars from Japan than to build them here.

The thinking five years ago was twofold: first, the strategy let Toyota build more cars where the customers were; second, it was a shrewd political move trying to win over Americans worried about auto jobs moving out of the country.

Toyota's pause in the U.S. also comes after the automaker’s concerns that production was going too fast to ensure quality standards were being met. Officials at the automaker last year admitted they needed to focus more on quality after a string of embarrassing recalls.

According to the Associated Press, a spokesman for Toyota in Tokyo declined to comment on the report.

By Patrick Olsen | June 20, 2007 | Comments (17)
Tags: Toyota

Comments 

Tony

This is the reason Toyota is such a great company . They are interested in making sure their quality is not compromised, simply to crank out more product. The Big 3 might take a lesson here...

me

Sounds like Toyota has a plan....say bye bye to those American Jobs and hello to more Japanese imports. I think its great that Ford has passed Toyota in Quality and thats with utilizing older plants. This is the reason Ford is such a great company. Ford is an American company.

Dan

me-
Oh man, you just opened up a whole can of worms. Good luck!

Everyone else-
Could it be the yen problem, or could it (at least in part) be this?

http://delong.typepad.com/sdj/2005/07/toyota_votes_wi.html

I'll quote in part:
"He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment...."

this is why "the big 3" has trouble, there are too many insurance cost and all of that BS that japan and canada dont charge. Don't blame it on product or any crap. Blame it on being an American, a very lazy whiney american. GM is managing to get around the stupid people, but ford and chrysler are still crap.

J

See, Canada and Japan has national health program, while the so called Number 1 power in the world has nothing like that. And this is one of the reason why GM, FoMoCo and DCX has has to deal with all these costs.

Plus, the medical cost over here in the states is so much higher because people are just sue crazy! Which drives up the insurance.

Common sense tells you that you do not put a hot cup of coffee between your legs when you get it from a drive through. Common sense also tells you not to let loose of your kids in the restaurant with hot food, drinks, and sharp silverware everywhere.

Juan Carlos

and why make them here when they can make them in mexico or honduras for less?

Tyler

Isn't that what Ford does???

Adrian

Dan,

As a native Mississippian and employee at the Nissan facility here in Canton, I personally take offense to your insinuations and the comments on Mr. Delong's web log. Yes, we've had our issues, but they have been nothing unique when you compare us to other facilities in the U.S., Canada, and Mexico. For one thing, if we were so stupid and illiterate here in the South, why would these manufacturers and suppliers continue to invest billions of dollars here? For example, Toyota has recently committed to building a new facility near Tupelo that will put out the Highlander. Paccar (Peterbilt, Kenworth & DAF) has also committed to building a diesel engine plant in Columbus, MS as you and others can see in the following links:

http://www.toyota.com/about/news/manufacturing/2007/04/18-1-mississippi-groundbreak.html

http://www.paccar.com/NewsReleases/article_news.asp?file=2135

The fact is, Dan, us Southerners are not the backwards, barefoot hicks you and people like you think we are. We're highly skilled, competent, and educated here at the Canton plant. I can't think of another plant the has the number of degreed or some level of post-secondary educated workers who take the utmost pride in their work. I suggest you take some time to reeducate yourself on issues before you take the word of someone from Berkeley. Especially one who worked under Clinton.

Juan Carlos

maybe in comparison adrian is what dan is saying. what is slowing things is property value/taxes and insurance. and they go tot he south since the south tends to be have cheaper land.

are you guys union?

Adrian

No. We're not union and we want to keep it that way.

Dan

Adrian-
The "he" isn't Mr. Delong (who's weblog happened to just be an early find on google), it's Gerry Fedchun, president of the Automotive Parts Manufacturers' Association. The comment isn't some sort of attack of individuals from the southern United States (even oversensitive ones), but rather an illustrative anecdote. While I agree that Mr. Delong's opinion on the matter is a bit caustic, using ad hominem attacks about his political opinions doesn't help your argument. If you wanted to rally against the unforunate stereotype of "stupid and illiterate" southerners, you've really just done a diservice to your cause.
I don't believe anyone outside of the boardroom where these decisions are made knows for sure why plants are placed where they are, but the low wages, inexpensive land and lax environmental restrictions in the southern US are likely culprits. These aren't some sort of elitist opinions brought from on high in an ivory tower, these are publicly available facts available anywhere (and all too familiar to those of us who have lived, and continue to have contacts, all over this country, even the South).
The point, however, is something you've completely missed. There are significant advantages in building factories outside of the US that weren't mentioned in the article. The advantages seem to now be outweighing the pros of locating here that were listed earlier. Literacy is disgustingly low in this country (compared to other first world nations), and the sky high medical costs can actually harm our ability to attract business. Even our near neighbor Canada is doing a much better job. These combined with other factors that neither of us are probably familiar with lead to the US being at a competitive disadvantage. I have no doubt at all that you and your fellow workers are highly educated, skilled, and competent. Unfortunately it appears that you are above the norm, since one exception (or even a handful of them) does not break a trend. While we may be wealthy, in many ways we have fallen behind the rest of the industrial world, and this is just one more piece of evidence in what is becoming and insurmountable pile.

(I do, however, apologize for posting a link to something so opinionated. For a better, fairer article on the same topic, try http://www.cbc.ca/cp/business/050630/b0630102.html)

Dan

Ugh, remove that end bracket to get the link to work.

Adrian

Dan,
I’m well aware that it wasn’t Mr. Delong’s personal comment. I was referring to the web log in its entirety. Also, I and other Southerners aren’t “oversensitive”, I just think Gerry Fedchun’s comments are too stereotypical and have gone on for far too long. In regards to me using “ad hominem attacks” about Mr. Delong’s political opinions, give me a break! Can’t you take a little sarcasm?
I’m well aware of the advantages and disadvantages of placing factories wherever they may be. Probably more so than you. My only motive was to respond to a particular stereotype about the South in general and Southerners in particular. However, I do agree with you that literacy is critically low and healthcare is too expensive in this country for reasons that will take us too far away from the subject of cars and everything related. I also can’t say we’ve fallen behind the rest of the industrial world. Every nation has its strengths and weaknesses. It’s a fact that will always be with us.

SanchezSmith

The question is that they need to produce this cars in the USA, the popular ones like the Corolla or the Camry.

The more expensive models, like Lexus are not a problem because they are marketed for high income buyers so they can be make in Japan.

The problem are the toys like the Scion or the Yaris which need the artificially low yen to be competitive. Toyota tried to sell the Yaris long time ago in Europe and failed in most markets because it was extremelly expensive.

Dan

Adrian-
Since this discussion has gone off topic by quite a bit, this is the last I'll post in this thread and I'll allow you to have the last word if you so choose.
If any stereotypes were presented, it was of Americans as a whole. An argument for moving factories to other countries because of high training costs in the US is nonsensical at best if the problem only existed in one region. If the factories were moved to another state with the same argument, we'd have an entirely different situation. Therefore there were no stereotypes presented of Southerners in Mr. Fedchun's statements. (though there probably were in Mr. Delong's statements, for which I have already apologized) To react so strongly and angrily to a perceived slight seems to me to be looking for a fight on a particular topic, and therefore, oversensitive.
As for Gerry Fedchun's expertise on the matter... I took at face value that the head of an association based on auto parts manufacturing would know something about the business, and that to achieve the rank he has that one would have to overcome stereotypes and focus on facts. Since I have never had a discussion with the man, I admit I have nothing to base that opinion on other than his title.
As for sarcasm:
sar·casm
-noun
1. harsh or bitter derision or irony.
2. a sharply ironical taunt; sneering or cutting remark.
Making an attack on someone's argument because of their previos employment and political views is not sarcastic, it's a logical fallacy. Saracsm would be making arguments that were inadvertantly an ad hominem support of your opposition. Allowing logical fallacy to stand in debate is a mistake all too many of us make, and allow others to make everyday. Perhaps it's just a pet pieve of mine, but I think it really does a disservice to intellgent discourse in this country. (But then again, if I'm looking for intellegent discourse, what the heck am I doing on the internet? :) )

Adrian

Dan,
Here are a couple of nitpicks of my own:

A) "previos"
The correct spelling is previous. As in:

Main Entry: previous
Function: adjective
Date: 1625
1 : going before in time or order : prior
2 : acting too soon : premature

B) "peive"
The correct spelling of this one is peeve. Once again, as in:

Main Entry: peeve
Function: noun
Date: 1911
1 : a feeling or mood of resentment
2 : a particular grievance or source of aggravation

I suggest you check your spelling and sentence structure for coherent flow before you post your rants. You do a disservice to yourself when you post in such a manner. One more thing, Dan, the fact that you've responded so greatly to my opinion of a third party's statement makes me think you're the oversensitive one. Goodbye Dan, I have a life to live.

Adrian

Dan,

Before I get back to living my life, here are a few more nitpicks and pet peeves of mine:

“inadvertantly” should be spelled inadvertently; and my favorite which you incorrectly spelled two different ways:

“intellgent” and “intellegent”

It should be spelled intelligent. As in:

Main Entry: in tel li gent
Function: adjective
Date: 1509
1 a : having or indicating a high or satisfactory degree of intelligence and mental capacity b : revealing or reflecting good judgment or sound thought : skillful
2 a : possessing intelligence b : guided or directed by intellect : rational

I have nothing else to say. Goodbye once again Dan. I’m back to living my life.

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